Canadian Income Tax Brackets Calculator

Calculate your estimated federal and provincial income tax based on current Canadian tax brackets.

Your Income Details

Understanding Canadian Income Tax Brackets

Canada employs a progressive tax system, meaning that higher income earners pay a larger percentage of their income in taxes. This is achieved through a system of tax brackets, where different portions of your income are taxed at different rates. Both the federal government and provincial/territorial governments levy income taxes, and you are subject to both.

The tax brackets and rates are updated annually to account for inflation. This calculator uses the most recently available federal and provincial tax bracket information to provide an estimate. It is important to note that this is a simplified calculation and does not account for all potential deductions, credits, or specific tax situations. For precise tax advice, consult a qualified tax professional.

How the Calculation Works (Federal Tax)

The federal income tax is calculated by applying the federal tax rates to successive portions (brackets) of your taxable income. For example, if the first bracket is 15% on income up to $50,000 and the second is 20.5% on income between $50,001 and $100,000:

• On $60,000 of taxable income:
• The first $50,000 is taxed at 15% ($7,500).
• The remaining $10,000 ($60,000 – $50,000) is taxed at 20.5% ($2,050).
• Total federal tax would be $7,500 + $2,050 = $9,550.

A similar process is followed for provincial/territorial taxes, using the specific brackets and rates for your chosen province or territory. The total tax shown is the sum of the estimated federal tax and provincial tax.

Key Terms:

• Taxable Income: This is your income after all allowable deductions have been subtracted from your gross income.
• Tax Brackets: Ranges of income taxed at specific rates.
• Marginal Tax Rate: The tax rate applied to your last dollar earned.
• Average Tax Rate: Total tax paid divided by total taxable income.

This calculator is intended for educational and estimation purposes only. Consult official government sources (Canada Revenue Agency – CRA, and your provincial tax authority) for the most accurate and up-to-date tax information.